Dow -82.91 at 17766.55, Nasdaq -46.83 at 5021.63, S&P -13.55 at 2079.28
I suppose market is going to continue the downtrend after it broke below 100 MA. However there was some dip buying at the start of the second half session, around the price level 2080.00. But market as of this time being is still weak. Crude oil on Monday still going lower post OPEC meeting last Friday.With the employment number looking slightly divergence, I think we might see some adjustment in the market on Monday or maybe early next week. From the technicals, the market is still undergoing a downtrend which may lead to more downside also.
To be honest I think market is still lacking in leadership and that is why we have been seeing a sideway for the past few months.
Direction for Monday 8 June, 2015; Up
Market Summary
Industry Watch
Strong: Consumer Staples, Materials, Telecom Services
Weak: Consumer Discretionary, Energy, Industrials, Technology
Other Market Moving Factor:
- No progress between Greece and creditors
- Dow Jones Transportation Average weak once again
- S&P 500 undercuts its 100-day moving average, which has been an important area of support throughout 2015
- Apple and many large-cap tech stocks are underperforming
Broadly speaking, the Monday session was very quiet with no corporate news to account for the decline; however, the continued lack of progress between Greece and its creditors weighed on investor sentiment in Europe and the U.S.
As for Greece, Finance Minister Yanis Varoufakis met with his German counterpart, Wolfgang Schaeuble, today, describing the meeting as "very helpful." That being said, Bloomberg reported there appear to be growing differences between German Chancellor Angela Merkel and Mr. Schaeuble with regard to the handling of the crisis.
Interestingly, the S&P 500 climbed off its session low in the afternoon once the Wall Street Journal reported that Greece's creditors have offered to extend the current bailout program until March 2016. The extension would be achieved by drawing EUR11 billion from the bank bailout fund. The news helped the benchmark index make a brief return above its 100-day average before sliding to a new low ahead of the close.
Nine sectors registered losses with all six cyclical groups ending in the red. The largest sector by weight—technology (-1.2%)—lagged throughout the day, which kept a lid on the overall market. Top-weighted components like Apple (AAPL 127.80, -0.85), Microsoft (MSFT 45.73, -0.41), and Google (GOOGL 543.48, -6.05) lost between 0.7% and 1.1% while high-beta chipmakers also struggled. Shares of Intel (INTC 31.30, -0.54) settled lower by 1.7% while the broader PHLX Semiconductor Index fell 1.9%.
Similarly, another high-beta group—transport stocks—kept the market under pressure with the Dow Jones Transportation Average losing 2.1%. The bellwether complex narrowed its June advance to 0.4% as all 20 components registered losses with JetBlue's (JBLU 19.02, -1.47) 7.2% plunge leading the way. For its part, the industrial sector (-0.7%) underperformed throughout the day.
Unlike technology and industrials, the remaining cyclical groups ended near the broader market while the four countercyclical sectors settled ahead of the S&P 500. Consumer staples (-0.1%) and telecom services (+0.2%) ended near their flat lines while health care (-0.4%) and utilities (-0.6%) settled just ahead of the broader market.
Interestingly, the utilities sector received no respite from today's strength in Treasuries that pressured the benchmark 10-yr yield to 2.39% (-2 bps).
Today's participation was on the light side with fewer than 685 million shares changing hands at the NYSE floor.
Tomorrow, the Wholesale Inventories report for April (Briefing.com consensus 0.2%) and the April Job Openings and Labor Turnover Survey will both be released at 10:00 ET.
Global Market
Asian Markets Close: Japan’s Nikkei -0.02%; Hong Kong’s Hang Seng +0.2%; China’s Shanghai Composite +2.2%
Most markets in the Asia-Pacific region began the new week on a lower note, but not the Shanghai Composite. It jumped another 2.2% on the heels of last week’s 8.9% gain. That move followed some generally disappointing trade data for May that featured a 2.5% decline in exports and a 17.6% decline in imports. The soft export figure acted as a drag on sentiment for regional markets.
Economic data
- China
- May Trade Balance $59.49 bln (expected $44.95 bln; prior $34.13 bln)
- Exports -2.5% (expected -5.0%; prior -6.4%)
- Imports -17.6% (expected -10.7%; -16.2%)
- Japan
- April Adjusted Current Account Balance JPY 1.27 tln (expected JPY 1.45 tln; prior JPY 2.07 tln)
- May Bank Lending +2.6% year-over-year (expected +2.6%; prior +2.6%)
- Q1 GDP Revised +1.0% quarter-over-quarter (expected +0.7%; prior +0.6%); +3.9% year-over-year (expected +2.7%; prior +2.4%)
Equity Markets
- Japan’s Nikkei posted a fractional loss for the session following an upward revision to Q1 GDP growth. Gains in the technology (+0.8%) and consumer non-cyclical +0.5%) sectors were offset by losses in the communications (-0.7%) and industrial (-0.6%) sectors. Individual standouts included Mitsui Mining & Smelting (+4.5%), Shiseido (+3.4%), and MEIJI Holdings (+3.2%). Pacing the laggards were Dentsu (-3.7%), Kansai Electric Power (-3.1%), and Tokyo Electric Power (-2.8%). Out of the 225 index members, 103 ended higher, 115 finished lower, and 7 were unchanged.
- Hong Kong’s Hang Seng increased 0.2%, bolstered by gains in the energy sector (+0.4%) and leading financial issues. Bank of Communications (+8.0%), Bank of China (+3.7%), and Ping An Insurance (+3.1%) sat atop the list of winners while China Mengniu Dairy (-5.4%) and Want Want China Holdings (-3.9%) led the losers. Out of the 50 index members, 19 ended higher, 29 finished lower, and 2 were unchanged.
- China’s Shanghai Composite jumped 2.2% on the back of an 8.9% gain last week. The advance followed some disappointing trade data for May that showed a decline in both exports and imports, bolstering speculation that further policy stimulus will be seen. The Composite also benefited from speculation that ‘A’ shares will be included in the MSCI Emerging Markets Index. That decision will be made June 9. The Shanghai Composite is up 11.3% month-to-date and 58.6% year-to-date.
- India’s Sensex declined 0.9%, finishing near its lows for the day. The basic materials (-2.7%), energy (-1.8%), and financial (-1.0%) sectors were the weakest links. Vedanta (-3.2%), Tata Steel (-3.0%), and Sun Pharmaceutical (-2.3%) led all decliners. Tata Power (+1.4%) and Bajaj Auto (+1.1%) were the only stocks that gained more than 1.0%. Out of the 30 index members, 6 ended higher and 24 finished lower.
- Australia’s S&P/ASX 200 — closed for holiday (Queen’s Birthday)
- Regional advancers: Taiwan +0.3%, Vietnam +0.3%
- Regional decliners: South Korea -0.1%, Malaysia -0.3%, Indonesia -1.7%, Singapore -0.4%, Thailand -0.1%, Philippines -0.6%
FX
- USD/CNY +0.04% at 6.2056
- USD/INR -0.01% at 64.110
- USD/JPY -0.3% at 125.28
EUROPE
Major European indices trade lower across the board amid continued lack of progress between Greece and its creditors.
- Eurozone June Sentix Investor Confidence fell to 17.1 from 19.6 (expected 18.7)
- Germany’s Industrial Production +0.9% month-over-month (expected 0.5%; prior -0.4%) while April Trade surplus expanded to EUR22.30 billion from EUR19.40 billion (expected EUR19.40 billion) as imports -1.3% (expected 0.5%; prior 2.4%) and exports +1.9% (consensus 0.1%; last 1.3%)
Closing Prices
- UK’s FTSE: -0.2%
- Germany’s DAX: -1.2%
- France’s CAC: -1.3%
- Spain’s IBEX: -1.2%
- Portugal’s PSI: -2.7%
- Italy’s MIB Index: -0.9%
- Irish Ovrl Index: -0.2%
- Greece ASE General Index: -2.7%
Macroeconomic Data
Economic Data
from Briefing.com
- No Economic Data
Market Internals
NYSE:
Lower Volumes than the day before – 698.0M vs 783.4M
Decliners outpaced Advancers (adv/dec): 895 / 2158
New Lows outpaced New Highs (highs/lows): 63 / 122
NASDAQ:
Lower Volumes than the day before – 1700.6M vs 1832.5M
Decliners outpaced Advancers (adv/dec): 1016 / 1810
New Highs outpaced New Highs (highs/lows): 134 / 33
VOLATILITY S&P500 (VIX)
15.29 +1.08 (+7.60%)
Internals look to be bearish but volume is weaker, so that leaves me some room. VIX also reflected more fear in the market as it gap up on Monday and broke above resistance level of 15.00. However it appears to be held below by its 200 MA.
Technical Updates
17,766.55 -82.91 (-0.46%)
Volume: 86,298,280 (below average of 99,494,619)
Range: 17,760.61 - 17,852.35
Range: 17,760.61 - 17,852.35
5,021.63 -46.83 (-0.92%)
Volume: 388.2M (below average of 427,261,150)
Volume: 388.2M (below average of 427,261,150)
Range: 5,014.06 - 5,069.00
2,079.28 -13.55 (-0.65%)
Volume: 488.3M (above average of 518,772,138)
Range: 2,079.11 - 2,093.01
Both DOW and NASDAQ are sitting on their respective support while S&P broke below its channel. According to the MACD, the 3 indices are getting more bearish momentum. DOW and S&P went below their 20 and 50MAs, while NASDAQ is still supported by its 50MA. Not much bullishness in sight though but I think a pullback is likely...
Commodities
Closing Commodities: Natural Gas Rallies Over 4% On Weather, Oil FallsCommodities
- The dollar index continued to slide lower today, which provide price support to select commodities, such as gold
- Natural gas rallied today, but this was largely due to current weather conditions.
- July nat gas futures ended today’s session 4.6% higher at $2.71/MMBtu
- WTI sold off today following Iraq news/post-OPEC decision, ultimately ending the day $0.97 at $58.16/barrel
- Aug gold gained $5.20 today to $1173.30/oz, while July silver lost $0.04 to $15.95/oz.
- July copper rose $0.01 to $2.70/lb
Energy
- July crude oil futures fell $0.97 to $58.16/barrel
- July natural gas closed $0.12 higher at $2.71/MMBtu
- RBOB Gasoline closed $0.02 lower to $2.01/gallon
- Heating oil futures closed $0.02 lower at $1.85/gallon
Agriculture
- July corn closed $0.04 higher at $3.65/bushel
- July wheat closed $0.09 higher to $5.28/bushel
- July soybeans closed $0.06 higher to $9.45/bushel
- Ethanol closed flat at $1.55/gallon
- Sugar #11 closed 0.11 cents higher to 12.16 cents/lb
Metals
August gold ended today’s session $05.20 higher at $1173.30/oz
- July silver closed $0.04 lower at $15.95/oz
- July copper closed $0.01 higher at $2.70/lb
Currencies
- The U.S. Dollar Index fell 1.06% today to 95.28 despite U.S. President Obama denying that he called the strong dollar "a problem" at the G7 meeting in Germany
- The Employment Situation Report for May released on Friday showed strong job creation and wage growth in the U.S. economy, but all of the gains from the resulting dollar rally have now been erased
- EUR/USD: +1.48% to $1.1277
- The impasse in Greece's negotiations with its creditors appears more intractable than ever. Between Greek Prime Minister Alexis Tsipras's remarks to Parliament on Friday and German Chancellor Angela Merkel's comments today at the G7, there is little apparent common ground on an aid package for Greece. The Greek drama has not been affecting the currency pair for some time
- USD/JPY: -0.76% to 124.64
- Overnight, Japanese Q1 GDP was revised up to 3.9% y/y from the initial estimate of 2.4%. Analysts had been looking for a revision to about 2.7%
- GBP/USD: +0.40% to $1.5337
- USD/CHF: -1.14% to 0.9287
- USD/CAD: -0.20% to 1.2412
- AUD/USD: +0.83% to $0.7689
- NZD/USD: +1.29% to $0.7138
- The RBNZ will meet on Wednesday
- An electoral defeat for Turkish President Erdogan sent the lira tumbling as there is a possibility of early elections
- USD/TRY: +3.55% to 2.7545
Bonds
Yield Curve Steepens
- U.S. government debt rallied today in a lackluster session with no data releases. Equities took losses but fixed-income markets continued to digest the robust Employment Situation Report from Friday and this likely kept buyers on the sidelines
- Yield Check:
- 2-yr: -4 bps to 0.68%
- 5-yr: -3 bps to 1.71%
- 10-yr: -2 bps to 2.39%
- 30-yr: unch at 3.12%
- News:
- A spokesman for the European Commission said that the EC will keep working on a solution to the Greek Crisis but that its own proposals would be the starting point
- Angela Merkel said that creditors' proposals are the only ones on the table
- French Finance Minister Michel Sapin said this morning that Grexit would "not be serious from a financial or economic point of view."
- In the afternoon, ECB governing council member Christian Noyer said the consequences of a Greek exit from the eurozone would be limited to Greece itself
- U.S. President Barack Obama spoke about Greece at the G7 Summit, saying "If both sides show sufficient flexibility, we can get this problem resolved....but it will need tough decisions from all involved."
- President Obama had to deny rumors that he had said the strong dollar was "a problem" at the G7 meeting in Germany
- The exposure of investors to higher interest rates is higher than at any point in history based on portfolio duration, according to Bloomberg
- A spokesman for the European Commission said that the EC will keep working on a solution to the Greek Crisis but that its own proposals would be the starting point
- Commodities:
- WTI Crude: -1.61% to $58.18/bbl.
- Gold: +0.46% to $1,173.50/troy oz.
- Copper: +0.41% to $2.7035/lb.
- Currencies:
- EUR/USD: +1.48% to $1.1278
- USD/Yen: -0.83% to 124.56
- Equities:
- S&P 500: -0.39% to 2,084.70
- Nasdaq 100: -0.82% to 4,440.50
- Data out Tuesday:
- April Wholesale Inventories (10:00 ET)
- April JOLTS – Job Openings (10:00 ET)
- New Supply:
- $24 billion 3-year note auction (results at 13:00 ET)
Treasury Yields:
- 2 Year Note 0.70% -0.03
- 5 Year Note 1.72% -0.03
- 10 Year Note 2.39% -0.02
- 30 Year Bond 3.11% UNCH
2/30 Spread: 241 bps ( +3 ) … 2/10 Spread: 169 bps ( +1 )
Preview for Tuesday 9 June, 2015
Economic Data
Tuesday (9 June) :
- Wholesale Inventories : 0.2% (Prior 0.1%)
- JOLTS - Job Openings : (Prior 4.994M)
Earnings Highlights
Tuesday (9 June) :
BMO - BURL CMN FGP HDS HOV ISLE LULU ZQK SAIC
AMC - APIC GEF LMNR MFRM OXM SIGM SURG
BMO - BURL CMN FGP HDS HOV ISLE LULU ZQK SAIC
AMC - APIC GEF LMNR MFRM OXM SIGM SURG
Summary
Maybe I have called for a rebound too soon. With no economic data on Monday, the bears somewhat took control of the market. There seems to be some short-covering before market closed. I suppose we should still see some dip buyers coming in for a technical rebound. But that doesn't mean the market is turning around. China's weak economic data is also likely to take a toll on the crude oil prices as the world's second largest economy is showing a low trade balance and slow growth.
Direction for Tuesday 9 June, 2015; Up
2015 Daily Directional Accuracy: 45/84 (53.57%)
2015 Daily Directional Accuracy: 45/84 (53.57%)
2015 Weekly Directional Accuracy: 12/20 (60.00%)
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